Dive Brief:
- Jack in the Box has signed a deal to develop 37 new restaurants with Jeff Yablun and Frank Conley of Cedar Tree Restaurant Group. This is Jack in the Box’ largest development deal since mid-2021, when it restarted franchising, according to a press release.
- Cedar Tree will build new Jack in the Box units in four markets: Nashville, Tennessee; Baton Rouge, Louisiana; Greenville, South Carolina, and Charlotte, North Carolina.
- The QSR has signed 267 new franchise commitments since mid-2021 and expects to reach positive net unit growth next year. Cedar Tree is the company’s first new franchisee in over 10 years.
Dive Insight:
The deal also included the purchase of 46 existing units across those four Southeastern markets. This purchase is part of Jack in the Box’s ongoing effort to refranchise its company stores. CFO Tim Mullany discussed the refranchising strategy during the company’s fiscal Q4 2022 earnings call, and added that the company also benefited from the addition of a new franchisee.
Cedar Tree will develop seven new units in Baton Rouge, 16 in the Carolinas and 14 in Nashville, areas where Jack in the Box doesn’t have a strong presence. With greater market penetration in California and Texas, Jack in the Box’s franchise push is allowing the chain to eye new markets, including Salt Lake City and Louisville, Kentucky. The QSR plans to open new locations in these markets next year.
Jack in the Box has also been working to attract new multi-unit franchisees by offering discounted royalty rates, which could save operators up to $180,000 per location over five years. In October, the company rolled out a 1,350-square-foot, off-premise-only restaurant, which could help attract additional franchisees since this location is expected to speed up development and offer lower labor and construction costs.
